New exploration strategy a step closer, but questions remain

3rd March 2021 By: Donna Slater - Creamer Media Contributing Editor and Photographer

The Minerals Council South Africa and the Council for Geoscience are said to be close to publishing their so-called new strategic Exploration Implementation Plan.

Announced during the Joburg Indaba in October 2020, the new exploration strategy was then earmarked for development within three months, with Department of Mineral Resources and Energy (DMRE) director-general Thabo Mokoena saying South Africa needed to attract at least 3% of global exploration expenditure.

However, information about the phasing out of the current but “dysfunctional” (as labelled by many in the industry) South African Mineral Resources Administration System, and implementation, in its place of a prospecting cadastre system was not spoken of during a March 2 webinar hosted by law firm Fasken.

Neither were there any further concrete plans for how the new strategy would in actual fact change from the DMRE’s current exploration plans.

During the webinar, hosted a week before the yearly Prospectors & Developers Association of Canada conference, Mokoena said South Africa was looking to increase the country’s exploration attractiveness from the current 1% of global expenditure, to as much as 5%.

Mineral Resources and Energy Minister Gwede Mantashe said the department, in developing its new exploration strategy “took a route that is not normal” in that it outsourced its development to the Minerals Council and Council for Geoscience.

In explaining why the drafting of the new strategy did not involve the DMRE, he said that, if “we work together [in drafting it], we have a [joint] responsibility to make it work together.”

Mokoena said that even though the new strategy was still a work in progress, it would nonetheless yield the results that all parties involved wanted to achieve.

He explained that the primary objective of the plan was to “assign responsibilities” and that its “impact is quantified in delivering desirable results”.

Piggybacking off established mining expertise in South Africa, Mokoena suggested that the plan would become a “viable and vibrant plan that we will be able to implement”.

GAME CHANGING COLLABORATION

Minerals Council CEO Roger Baxter said that, although a lot of work has been done on exploration, it is nonetheless “a bit of a shame that we did not get [the new strategy] published a little earlier”.

He suggested that an earlier publishing of such a plan may have swayed the results of the recently published Fraser Institute’s Survey of Mining Companies 2020 that showed South Africa slipping broadly in many key mining aspects – from being ranked as the fortieth most attractive jurisdiction for investment in 2019, to sixtieth place in 2020.

In terms of the survey’s Policy Perception Index, South Africa again slipped, from fifty-sixth place in 2019, to sixty-sixth place in 2020. As for the survey’s Best Practice Mineral Potential Index, South Africa fell 23 positions, from being the thirty-fourth highest in 2019, to fifty-seventh in 2020.

For comparison, South Africa’s neighbour Botswana, ranked as the most attractive jurisdiction in Africa in 2020 when considering both policy and mineral potential, ranking eleventh out of 77 in overall investment attractiveness.

However, Baxter said the new exploration strategy demonstrated a lot of good ideas that have been put down.

He added that, while 2020 had been an “extremely challenging year”, it also demonstrated that the South African mining industry had the “tools and capability” to work in partnership with government and organised labour to help not only in getting the industry back to work, but also “saving lives, and saving livelihoods”.

While Covid-19 changed the way all sectors functioned and reprioritised many facets of business, Baxter said the pandemic also enabled the industry, in acting as a catalyst for both government and the Minerals Council, to start working together at reviving the domestic mining sector.

He pointed out that six different task teams were involved in various measures to resurrect the industry, with one team being focused on localisation and beneficiation, while another dealt solely with minerals exploration – two factors the industry wants specific attention to be paid to.

For the new exploration plan, Baxter said, it would be a “game changing plan” once it came out and was finalised in the not too distant future.

He said he has reason to believe the strategy would be ready for publishing within the “next month”.

In addition to increasing South Africa’s ability to attract global exploration expenditure, Baxter added that the Minerals Council also wants to increase the country’s mining sector contribution to gross domestic product to 10%. “We think this is very possible.”

In this regard, he said several challenges needed to be overcome, including major backlogs in certain of the licensing categories.

“We met with [Mokoena and his team] on [March 1], plotting a way to unblock those various licensing issues. There is a strong commitment from the DMRE team to resolve those backlogs as quickly as possible.”